CreditGate24, a Swiss marketplace lending platform based in Rüschlikon, Switzerland, has crossed the CHF 100 million milestone of money that has been lent through the platform since its inception. According to the company, it now accounts for nearly half of the Swiss market which it claims still holds a lot of growth potential.
“Achieving the CHF 100 million mark in just three years and an average growth rate of 290% clearly shows that we were able to generate a stable base of trust. This number will continue to grow as institutional investors show more and more interest in our viable investment model,” said Stefan Benkert, CEO of CreditGate24.
According to Christoph M. Mueller, founder and chairman of CreditGate24, the Swiss crowdlending space is still nascent and while rapid growth has been witnessed in the past years, the space is still underdeveloped when compared with countries such as China, the UK and the US. There’s still place for growth, notably in the institutional investor segment.
“Crowdlending has revolutionized the financial market and the competition has finally arrived, providing customers with fairer prices. The growth potential of the crowdlending market is still underestimated by market participants. We need to make the shift to crowdlending even more confidently so that other clients recognize the opportunity of this investment,” said Christoph M. Mueller, founder and chairman of CreditGate24.
One of the main appeal of peer-to-peer lending for borrowers is the lower interest rates than traditional bank rates, and for lenders, higher returns than a savings account or other investments. This is made possible by removing expensive middlemen such as banks from the equation.
Alternative financing and investment platforms have proven to be an interesting option for investors in low-yield environment seeking out alternatives to low-return savings accounts and term deposits.
Established in 2015, CreditGate24 has provided loans to more than 1,400 private individuals and small and medium-sized enterprises (SMEs) in Switzerland. The company operates an online platform that brings borrowers and private and institutional investors together, providing consumer and private loans and loans for SMEs and self-employed.
Customers of CreditGate24 have praised the solution as an “uncomplicated, transparent and lucrative alternative to banks or securities investments,” adding that on the investor side, “the risk is minimal and the yields very attractive.”
To celebrate its CHF 100 million milestone, the company has launched a special promotion for private customers, offering an immediate 10% discount on its service fee until the CHF 100 million mark of personal loans is reached.
The peer-to-peer lending market has experienced exceptional growth since 2010 globally and since 2012 in Switzerland. In the past few years in particular, Switzerland has witnessed a sharp increase in its crowdlending activity, but also in the overall crowdfunding space.
In 2017, crowdlending platforms like CreditGate24 allocated a volume of CHF 186.7 million in loans, a 239% increase from the previous year, according to Crowdfunding Monitoring Switzerland 2018. But it is the crowdinvesting segment that saw the biggest rise with an increase of 245% at a volume of CHF 135.2 million. Overall, the Swiss crowdfunding space grew by 192% to CHF 374.5 million in 2017, and a volume of CHF 900 million to CHF 1 billion is predicted for 2018.
Yet, the Swiss crowdfunding market remains relatively small and is “two to three years behind” countries with developed alternative financing industries. In comparison, China saw a volume of CHF 203 billion going through its crowdfunding platforms in 2016, the US CHF 25 billion, and the UK CHF 5.9 billion, while Switzerland only recorded a volume of CHF 128 million.
